Gold Upticks A Bit On Slightly Dovish FOMC Minutes
(Kitco News) - Gold prices are near steady in afternoon U.S. trading Wednesday, in the wake of the just-released FOMC minutes that were deemed as tilting barely toward the dovish camp on monetary policy. June Comex gold futures were last down $0.30 an ounce at $1,291.70. July Comex silver was last down $0.14 at $16.435 an ounce.
The U.S. data-point highlight of the week is Wednesday afternoon’s release of the Federal Open Market Committee (FOMC) minutes from the last meeting, held on May 1-2. At that meeting the Fed left interest rates unchanged, as expected. Today’s minutes showed FOMC members continue to expect to gradually raise interest rates, and likely to move again in June. The U.S. economy is likely to grow a little faster in the second quarter than in the first, members believed. FOMC members said they are cognizant about the uptick in inflationary price pressures, but not overly concerned about it. They said wage-inflation pressures remain muted. An overall U.S. price inflation pace running at about 2.0% on an annual basis is right about where the Fed would like it to be. However, FOMC members were a bit concerned about rising oil prices contributing to an unwanted additional uptick in inflation. Some FOMC members said an annual U.S. inflation rate slightly above 2.0% would not be problematic. The marketplace deemed the FOMC minutes as just slightly dovish, but markets did not show a big reaction to this afternoon’s report.
The world’s traders and investors were not so upbeat today, following comments Tuesday from U.S. President Donald Trump that suggested the U.S. and China are still far apart on a trade dispute resolution. Also, the NAFTA trade talks between the U.S., Mexico and Canada have broken down. Furthermore, Trump said his meeting with North Korea’s leader Kim Jong Un may not take place. Political uncertainty in Italy, as a new government tries to form, is also added to the mix of more anxiety in the world marketplace. All of the above augurs in favor of the safe-haven gold and silver markets.
The key “outside markets” today find Nymex crude oil prices weaker on profit taking after hitting a 3.5-year high on Tuesday. The rallying oil market is a bullish underlying factor for the raw commodity sector, including the precious metals—even though the metals have not seen much upside price action recently.
Meantime, the U.S. dollar index is solidly higher and hit another six-month high today. The appreciating greenback has been a major bearish element for the precious metals markets in recent weeks.
Technically, gold prices are in a two-month-old downtrend on the daily bar chart. The gold bears have the overall near-term technical advantage. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at the December low of $1,247.20. First resistance is seen at today’s high of $1,298.40 and then at $1,300.00. First support is seen at today’s low of $1,286.70 and then at this week’s low of $1,281.20. Wyckoff's Market Rating: 3.5
The silver bears have the overall near-term technical advantage. Silver bulls' next upside price breakout objective is closing prices above solid technical resistance at $17.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at the May low of $16.07. First resistance is seen at today’s high of $16.60 and then at this week’s high of $16.70. Next support is seen at this week’s low of $16.28 and then at the May low of $16.19. Wyckoff's Market Rating: 3.5.
July N.Y. copper closed down 610 points at 307.10 cents today. Prices closed nearer the session low today. The copper bulls and bears are back on a level overall near-term technical playing field. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the April high of 321.80 cents. The next downside price objective for the bears is closing prices below solid technical support at the May low of 301.40 cents. First resistance is seen at 310.00 cents and then at today’s high of 313.20 cents. First support is seen at today’s low of 304.85 cents and then at the May low of 301.40 cents. Wyckoff's Market Rating: 5.0.